While the highly "sophisticated" traders that make up the gold market continue to buy or sell the precious metal based on whether the Fed will or will not do the NEW QE tomorrow , China continues to do one thing. Buy.

Beijing continues to buy non-US gold, in the form of 68 tons in imports from Hong Kong in the month of June. The year to date total (6 months)? 383 tons.

Realistically, by now China, which hasn't provided an honest gold reserve holdings update to the IMF in years, most certainly has more gold than the IMF, and its 2814 tons, itself.

Unfortunately the communist driving this is in the White House. Red China knows the dollars it is receiving for its cheap lead-painted trinkets are losing value daily due to our massive spending (although this inflation is still not reported to the American public, who see it every time they buy groceries and gasoline), and it is simply trying to preserve the value.

It’s worse than that. They know that the reserve currency status of the USD hangs by a thread,as the “petrodollar”. So they are actively seeking its replacement with a gold backed Yuan/Renembi by entering into currency/trade agreements with other nations across the globe, undercutting the use of The Buck to settle commerce. When/if the fall of the USD occurs, the SWHTF like we can never imagine.

Count on a big war to keep the USD afloat; it’s worked before.

3
posted on 08/18/2012 5:15:58 AM PDT
by pingman
("Human history seems logical in afterthought, but a mystery in forethought." (Strauss & Howe))

“Its worse than that. They know that the reserve currency status of the USD hangs by a thread,as the petrodollar. So they are actively seeking its replacement with a gold backed Yuan/Renembi by entering into currency/trade agreements with other nations across the globe, undercutting the use of The Buck to settle commerce. When/if the fall of the USD occurs, the SWHTF like we can never imagine.”

That’s only partly right.

China has been enjoying a trade surplus because they have been pegging their currency to below market rates.

Moving to a gold-backed currency would be against all of the goals or the Chinese gov’t.

The Chicoms are dumping USD and buying gold at a rate of 3—400 tons a month. Why do they need us when the government is bankrupt? They’re no longer stepping up to buy our debt, so the Fed and private money are keeping our bond auctions afloat, for now.

It could all go ‘poof’ faster than you can log on and hit “sell”. Believe it.

7
posted on 08/18/2012 6:26:23 PM PDT
by pingman
("Human history seems logical in afterthought, but a mystery in forethought." (Strauss & Howe))

“It could all go poof faster than you can log on and hit sell. Believe it.”

I’m not disagreeing with that part.

I’m just saying that your scenario is not pursued by China because it would have disastrous consequences for them. They would have no U.S. citizenry to buy their stuff anymore.

They are hoarding gold for a different reason. They believe it’s going to get way more valuable. But it only looks more valuable right now because China and India are buying it like crazy. Once those countries cut back on purchases to put more stimulus money into their economies to keep the bubbles inflated the gold price won’t be up so high anymore.

Perhaps you’re missing the bigger picture. The one where our own government colludes with the Chinese, allowing their currency, the Yuan to appreciate. The Chinese economy grows and surpasses the US in size and value; Americans are impoverished, but the elites are covered. The Chinese become the dominant world player, and exact their foreclosure on American government lands and natural resources for the outstanding debts that we cannot pay of inflate away.

The signs are there; everywhere. We look the other way while China grabs new territory from our “friends” in SE Asia for their mineral wealth. China makes bilateral trade deals with our ‘friends’ excluding the use of the USD. The list goes on...

One more item to ponder. If the US was suddenly forced to monetize our entire debt through our gold holdings once we can no longer print the USD at will, having lost the world reserve currency status, gold would have to be worth $38,000/ ounce in our severely devalued currency. Chaos in the streets, riots, bloodshed. Societal collapse.

And, worst of all, when/if it happens, the US won’t have a friend in the world willing or able to help us out, because they’ll all be in the same boat, and blaming us.

9
posted on 08/21/2012 8:55:11 PM PDT
by pingman
("Human history seems logical in afterthought, but a mystery in forethought." (Strauss & Howe))

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